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December 2007

SFM Up North
A publication from the Duluth offices of SFM Companies
Editor: Kathleen S. Bray, Attorney

THIS MONTH'S TOPICS:

SOCIAL SECURITY OFFSET BASICS

Coordination of workers' compensation benefits with Social Security benefits arises in cases of permanent total disability. After a threshold of $25,000.00 in total disability benefits has been paid, the workers' compensation insurer may offset ongoing total disability benefits by the amount of the employee's Social Security disability benefits.

Minnesota Statutes § 176.101, subd. 4 states in relevant part:

Subd. 4. Permanent total disability. For permanent total disability, as defined in subdivision 5, the compensation shall be 66-2/3 percent of the daily wage at the time of the injury, subject to a maximum weekly compensation equal to the maximum weekly compensation for a temporary total disability and a minimum weekly compensation equal to 65 percent of the statewide average weekly wage. This compensation shall be paid during the permanent total disability of the injured employee but after a total of $25,000 of weekly compensation has been paid, the amount of the weekly compensation benefits being paid by the employer shall be reduced by the amount of any disability benefits being paid by any government disability benefit program if the disability benefits are occasioned by the same injury or injuries which give rise to payments under this subdivision. This reduction shall also apply to any old age and survivor insurance benefits.

The Social Security offset may result in total offset of workers' compensation benefits in some circumstances. Not only are the injured employee's disability benefits used in the offset calculations, but also any benefits received by the injured employee's dependents, so long as the dependent's benefits were also awarded as a consequence of the employee's work-related disability. Sundby v. City of St. Peter, 693 N.W.2d 206 (Minn. 2005).

For injuries occurring before October 1, 1995, the employee may be eligible for supplementary benefits after 208 weeks of benefits are paid. The insurer pays a supplemental benefit at a state-defined benefit rate (65% of the statewide average weekly wage), to help make up the gap created by the offset. Supplementary benefits are reimbursed by the Special Compensation Fund to the insurer.

The workers' compensation act also provides for coordination of dependents' benefits, when they are receiving weekly workers' compensation dependency benefits and government survivor's benefits. See Minn. Stat. § 176.111, subd. 21. An injured employee's old age or retirement Social Security benefits also result in an offset of the weekly workers' compensation total disability wage benefit.

INJURIES FROM VOLUNTARY RECREATIONAL ACTIVITIES

An injury arising out of a voluntary recreational activity typically is not compensable, pursuant to Minn. Stat. § 176.021, subd. 9, which provides:

Subd. 9. Employer responsibility for wellness programs. Injuries incurred while
participating in voluntary recreational programs sponsored by the employer, including health promotion programs, athletic events, parties, and picnics, do not arise out of and in the course of the employment even though the employer pays some or all of the cost of the program. This exclusion does not apply in the event that the injured employee was ordered or assigned by the employer to participate in the program.

In the case of Yusuf v. Hilton Hotel, No. WC06-187 (W.C.C.A., Dec. 4, 2006), the employee was injured while watching the "Housekeeping Olympics." The employee believed her attendance was mandatory at the event, which involved teams of housekeepers from associated Hilton hotels competing in housekeeping tasks such as making beds, hanging clothes and vacuuming through a cone-marked course. If the employee was not participating on a team, the employee was a spectator. Ms. Yusuf's supervisor gave her a sign to use to cheer on her team. The event took place during the employee's regular work shift, and she was on the clock during the event. The employees were not given as many rooms to clean that day, either. Ms. Yusuf's supervisor told her she was expected to be at the event. No one told her she could punch out and go home without being paid for the remainder of her shift, instead.

While the compensation judge found after a full evidentiary hearing that the employee's injury while in the role of spectator at the Housekeeping Olympics was part of a voluntary recreational activity, and therefore not compensable, the Workers' Compensation Court of Appeals reversed the decision and remanded it for further consideration. The appellate court questioned whether the Housekeeping Olympics was a recreational activity, as envisioned by the statute. The court noted that the activities were the same as the employee's day-to-day work activities, rather than recreational in nature. Also, the court expressed concern with the fact that employees remained on the clock for the event, and would not be paid if they chose not to attend.

Lesson to take from the Yusuf case? If the employer sponsors or provides a wellness program or recreational event in connection with an annual picnic, for example, exempting the activity from workers' compensation coverage will be more likely if the event does not mimic the employee's daily work activities, and the employee is not expressly or impliedly required to attend.

WHEN CAN AN EMPLOYER DRUG TEST AN EMPLOYEE AFTER AN INJURY?

In Minnesota, the circumstances under which an employer may drug test an employee following an injury are governed by statutes (see Minn. Stat. §181.950 - 181.957). The employer must have a written drug and alcohol testing policy that complies with the statutory requirements. The employer must give written notice to any affected employees of this testing policy, and also must post a notice of the policy in an "appropriate and conspicuous" location.

Assuming the written policy complies with the statute, and proper notice has been given, the employer may conduct "reasonable suspicion" testing of an employee who has sustained a workers' compensation injury, or who has caused another employee to sustain a work injury. A drug and alcohol test also may be required if the employee caused a work-related accident or was operating machinery that was involved in a work-related accident.

The statute is very specific with respect to testing standards, handling and responding to positive results, and limitations on discipline following a positive test. Generally, if a positive test is confirmed, the employee must first be given the opportunity to participate in an alcohol or drug rehabilitation program at the employee's expense, before discharge may occur.

For more detailed information, consult SFM's "Alcohol and drug testing of employees and job applicants" Legal Advisory or other materials available from SFM's online Resource Catalog, and be sure to consult your corporate attorney before implementing any drug and alcohol testing program.

NOTICE: The distribution and receipt of the information provided in this newsletter does not create or continue any attorney-client relationship. The information provided is general in nature and should not be treated as legal advice concerning any particular set of facts or circumstances. Recipients should consult with their attorney before acting on any information discussed in each issue.

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